City gets clean audit, with suggestions

Money

By Molly McGowan / Times-News

Published: Friday, February 1, 2013 at 05:41 PM.

Burlington’s financial records for the fiscal year 2011-2012 are clean, but the city should adopt stricter policies to strengthen internal controls on employee spending, according to an independent audit by the Stout, Stuart, McGowen & King accounting firm.

The city had a successful financial year, despite the fact that new development has decreased. The city’s assets exceeded its liabilities by $270,762,694, and total net assets increased by $3,124,131, or 1.17 percent, compared to the fiscal year 2011.

An overall drop in construction was evident in the decreased revenue the city gained through building permits and fees; these revenues totaled $470,433, which was $20,935 less than in the 2011 fiscal year.

Burlington’s governmental expenses totaled $48,453,302, an increase of $536,655, and its expenses for business-type activities were $23,768,365, an increase of $1,594,214.

Though the audit found Burlington’s books to be clean, the independent auditors made two suggestions that would improve internal financial reporting.

According to a letter included in the audit, “We noted instances where the City employees were requesting the City’s retail store charge cards and not submitting documentation with Supervisor’s approval, intended use of card and correct general ledger account number to be charged for expenditure.”

Burlington’s financial records for the fiscal year 2011-2012 are clean, but the city should adopt stricter policies to strengthen internal controls on employee spending, according to an independent audit by the Stout, Stuart, McGowen & King accounting firm.

The city had a successful financial year, despite the fact that new development has decreased. The city’s assets exceeded its liabilities by $270,762,694, and total net assets increased by $3,124,131, or 1.17 percent, compared to the fiscal year 2011.

An overall drop in construction was evident in the decreased revenue the city gained through building permits and fees; these revenues totaled $470,433, which was $20,935 less than in the 2011 fiscal year.

Burlington’s governmental expenses totaled $48,453,302, an increase of $536,655, and its expenses for business-type activities were $23,768,365, an increase of $1,594,214.

Though the audit found Burlington’s books to be clean, the independent auditors made two suggestions that would improve internal financial reporting.

According to a letter included in the audit, “We noted instances where the City employees were requesting the City’s retail store charge cards and not submitting documentation with Supervisor’s approval, intended use of card and correct general ledger account number to be charged for expenditure.”

Stout, Stuart, McGowen & King recommended that when city employees ask to use those credit cards in the future, they submit supervisor-approved documentation indicating how they intend to spend the funds.

Peggy Reece, Burlington’s director of finance and risk management, said employees had been required to sign out the credit cards when they were being used for travel expenses, but now they’ll be required to do the same for other retail expenses, such as notebooks for the office.

The second recommendation was a repeat that Stout, Stuart, McGowen & King had originally made on June 26, 2012, in regards to the unaccounted-for gifts and prizes awarded through the city’s Wellness Program.

This followed an in-house investigation into the program, prompted by City Councilman Bob Ward’s request for documentation of prizes and awards distributed through the city’s program.

The investigation resulted in one year of probation for Human Resource Director Aaron Noble, “for failure to implement proper policies and maintain desired records for the operation of the City’s Wellness Program,” according to a statement the city released after the incident.

The auditors recommended that Burlington “implement written policies and procedures to identify eligibility for prizes and incentives paid for by City funds,” their distribution, documentation and winner selection processes.

The city’s long-term debt increased $15,759,503, and the general fund budget balance was $8,211,865.